Klub, a fintech platform that provides revenue-based financing (RBF) said it will invest over Rs 250 crore in nearly 350 companies in e-commerce and online consumer businesses. So far, the company has funded more than 55 digital-first businesses including Eat.Fit, The Man Company, Tjori, and Healthy Cravings. The company said its model of taking revenue share as returns instead of equity dilution or fixed EMIs, makes it ideal for a post-Covid financing ecosystem.
“With a robust supporting ecosystem of marketplaces, commerce, marketing and distribution platforms, we have seen multiple online-first brands recovering to pre-Covid levels, while offline brands are transitioning to online to target customers,” said Anurakt Jain, co-founder at Klub, a Singapore-based firm which was founded in 2019 and is backed by 9Unicorns, Surge, Kunal Shah and Tracxn Labs.
From a funding perspective, there are currently more than 6,000 new age brands along with over 7.5 lakh sellers on platforms such as Amazon and Flipkart, making the total addressable market size at $100 billion by 2025. Also, direct to consumer brands are not just limited to tier 1 or 2 cities as smaller cities are seeing a massive entrepreneurship explosion.
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Klub said the RBF model is especially suited for brands when the revenue profile is seasonal or uncertain as it allows them to manage their cash flows better. Consumer brands require financing to match their growth needs that are currently unmet. But, the one-size-fits-all approach of traditional modes of equity and debt capital does not always meet the financing requirements for these brands. We aim to not only provide them access to alternative financing but also to an exclusive community where brands and investors can come together to explore and grow together more holistically.
The company has two offerings – Klub Blaze, which is the shorter tenure product that ranges from 3 to 9 months with an amount starting from 2 lakhs upto 25 lakhs and Klub Gro, a longer tenure product for 12 to 18 months with funding of 25 lakhs upto 5 crores in a single investment.